Boston Scientific Announces Results for Third Quarter Ended September 30, 2007
PRNewswire-FirstCall
NATICK, Mass.
(NYSE:BSX)

NATICK, Mass., Oct. 19 /PRNewswire-FirstCall/ -- Boston Scientific Corporation (NYSE: BSX) today announced financial results for the third quarter ended September 30, 2007, as well as guidance for net sales and earnings per share (EPS) for the fourth quarter of 2007.

  Highlights
   - Reported net sales of $2.048 billion, which was at the mid-point of
     guidance, and adjusted EPS of $0.20, which exceeded guidance
   - Attained number one position in the worldwide drug-eluting stent (DES)
     market
   - Achieved DES market share leadership in Japan
   - Reached 56 percent market share in the U.S. DES market, up from
     54 percent last quarter
   - Reported year-over-year worldwide cardiac rhythm management (CRM) sales
     growth of 16 percent, including implantable cardioverter defibrillator
     (ICD) growth of 18 percent
   - Announced several new initiatives designed to increase shareholder
     value, including the planned sale of business units, and expense and
     head count reductions
   - Amended the Company's term loan agreement, providing increased
     financial flexibility, while prepaying $1 billion of the loan

Net sales for the third quarter of 2007 were $2.048 billion as compared to $2.026 billion for the third quarter of 2006. Worldwide sales of the Company's drug-eluting coronary stent systems for the third quarter of 2007 were $448 million as compared to $572 million for the third quarter of 2006. U.S. sales of drug-eluting coronary stent systems for the third quarter of 2007 were $240 million as compared to $384 million for the third quarter of 2006. International sales of drug-eluting coronary stent systems were $208 million for the third quarter of 2007 as compared to $188 million for the third quarter of 2006. Worldwide sales of coronary stent systems for the third quarter of 2007 were $507 million as compared to $607 million for the third quarter of 2006. U.S. sales of coronary stent systems for the third quarter of 2007 were $268 million as compared to $397 million for the third quarter of 2006. International sales of coronary stent systems were $239 million for the third quarter of 2007 as compared to $210 million for the third quarter of 2006.

Worldwide sales of the Company's CRM group for the third quarter of 2007 were $517 million, which included $372 million of ICD sales, as compared to worldwide CRM sales of $446 million for the third quarter of 2006, which included $315 million of ICD sales. U.S. CRM sales for the third quarter of 2007 were $343 million, which included $261 million of ICD sales, as compared to U.S. CRM sales of $296 million for the third quarter of 2006, which included $221 million of ICD sales. International CRM sales for the third quarter of 2007 were $174 million, which included $111 million of ICD sales, as compared to International CRM sales of $150 million for the third quarter of 2006, which included $94 million of ICD sales.

Reported net loss for the third quarter of 2007 was $272 million, or $0.18 per share. Reported results for the third quarter of 2007 included acquisition- and divestiture-related charges (after-tax) of $435 million, or $0.29 per share, which included a previously disclosed and expected loss of approximately $352 million, primarily associated with the impairment of goodwill in connection with the anticipated sale of our auditory and drug pump businesses and $75 million of in-process research and development related to the acquisition of Remon Medical Technologies, Inc. Adjusted net income for the quarter, excluding acquisition- and divestiture-related charges and amortization expense, was $299 million, or $0.20 per share. Reported net income for the third quarter of 2006 was $76 million, or $0.05 per share. Reported results for the third quarter of 2006 included acquisition-related charges (after-tax) of $77 million, or $0.05 per share. Adjusted net income for the third quarter of 2006, excluding acquisition-related charges and amortization expense, was $271 million, or $0.18 per share.

"The quarter represented something of a turn for us, with a number of positive developments, including our attaining the number one position in worldwide drug-eluting stent sales, significant market share growth in drug-eluting stents, strong year-over-year cardiac rhythm management growth and continued solid growth in Endosurgery," said Jim Tobin, President and Chief Executive Officer of Boston Scientific. "Going forward, the restructuring initiatives we announced earlier this week will help us better focus on our core businesses and priorities, to strengthen the Company for the future and should lead to improved, long-term, profitable sales growth."

Guidance for Fourth Quarter 2007

The Company estimates net sales for the fourth quarter of 2007 between $2.05 billion and $2.15 billion. Adjusted earnings -- excluding charges related to acquisitions, divestitures and restructuring, and amortization expense -- are estimated to be in a range of $0.14 and $0.19 per share. The Company estimates a net loss on a GAAP basis between $0.09 and $0.02 per share. GAAP guidance excludes any potential gains or losses related to disposition of previously announced business divestitures.

Boston Scientific officials will be discussing these results with analysts on a conference call at 8:00 a.m. (ET) Friday, October 19, 2007. The Company will webcast the call to all interested parties through its website: http://www.bostonscientific.com/. Please see the website for details on how to access the webcast. The webcast will be available for one year on the Boston Scientific website.

Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: http://www.bostonscientific.com/.

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "intend" and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding our financial performance and flexibility, our restructuring plan, our growth strategy, market recovery and our market position. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.

Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and, future business decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item IA - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file thereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.

Use of non-GAAP Financial Information

To supplement Boston Scientific's consolidated condensed financial statements presented on a GAAP basis, the Company discloses certain non-GAAP measures that exclude certain charges, including non-GAAP net income/loss and non-GAAP net income/loss per diluted share. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. A reconciliation of the non-GAAP financial measures to the corresponding GAAP measures is included in the tables below. In addition, an explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included under "Use of Non-GAAP Financial Measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP.

   CONTACT:  Paul Donovan                    Dan Brennan
             508-650-8541 (office)           508-650-8538 (office)
             508-667-5165 (mobile)           617-459-2703 (mobile)
             Media Relations                 Investor Relations
             Boston Scientific Corporation   Boston Scientific Corporation



                      BOSTON SCIENTIFIC CORPORATION
                   CONDENSED GAAP RESULTS OF OPERATIONS
                               (Unaudited)

                                                    Three Months Ended
                                                       September 30,
  In millions, except per share data              2007              2006

  Net sales                                       $2,048            $2,026
  Cost of products sold                              575               630
  Gross profit                                     1,473             1,396

  Operating expenses
    Selling, general and administrative
     expenses                                        719               719
    Research and development expenses                271               272
    Royalty expense                                   48                57
    Amortization expense                             155               153
    Purchased research and development                75
    Loss on assets held for sale                     352
                                                   1,620             1,201
  Operating (loss) income                           (147)              195

  Other income (expense):
    Interest expense                                (147)             (143)
    Other, net                                        35                (1)

  (Loss) income before income taxes                 (259)               51
    Income taxes                                      13               (25)
  Net (loss) income                                $(272)              $76


  Net (loss) income per common share -
   assuming dilution                              $(0.18)            $0.05

  Weighted average shares outstanding -
   assuming dilution                             1,489.8           1,486.7


                      BOSTON SCIENTIFIC CORPORATION
             NON-GAAP NET INCOME (LOSS) AND NET INCOME (LOSS)
                     PER COMMON SHARE RECONCILIATIONS
                               (Unaudited)

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                                      Three Months Ended  Three Months Ended
                                         September 30,       September 30,
                                             2007                2006
                                                Impact             Impact
                                         Net      per                per
                                        income  diluted       Net  diluted
                                        (loss)   share      income  share
  In millions, except per share data
  GAAP results                          $(272)  $(0.18)       $76   $0.05
  Non-GAAP adjustments:
    Acquisition and divestiture
     related charges                      435     0.29         77    0.05
    Amortization expense                  136     0.09 (1)    118    0.08
  Adjusted results                       $299    $0.20 (1)   $271    0.18

  (1) Calculated by assuming stock-based dilution of 12.5 million shares

                                                    Three Months Ended
                                                       September 30,
                                                  2007              2006

  Acquisition and divestiture related
   charges:
    Loss on assets held for sale                    $352
    Purchased research and development                75
    Integration costs (a)                             10                $9
    Step-up value of inventory sold (b)                                 94
    Fair-value adjustment for the sharing
     of proceeds feature of the Abbott
     Laboratories stock purchase (c)                                    13
    CRM technology offering charge (b)                                  31
                                                     437               147
    Income tax benefit (d)                            (2)              (70)
  Acquisition and divestiture related
   charges, net of tax                              $435               $77

  Amortization expense:
    Amortization expense                            $155              $153
    Income tax benefit (d)                           (19)              (35)
  Amortization expense, net of tax                  $136              $118

  (a) Recorded $8 million in 2007 to selling, general and administrative
      expenses, $2 million to cost of products sold; recorded $7 million in
      2006 to selling, general and administrative expenses, and $2 million
      to research and development expenses.
  (b) Recorded to cost of products sold.
  (c) Recorded to other, net.
  (d) Amounts are tax effected at the Company's anticipated effective tax
      rate, unless the amount is a significant unusual or infrequently
      occurring item in accordance with FASB Interpretation No. 18,
      "Accounting for Income Taxes in Interim Periods".


                      BOSTON SCIENTIFIC CORPORATION
                   CONDENSED GAAP RESULTS OF OPERATIONS
                               (Unaudited)

                                                    Nine Months Ended
                                                       September 30,
  In millions, except per share data              2007              2006

  Net sales                                       $6,204            $5,756
  Cost of products sold                            1,706             1,681
  Gross profit                                     4,498             4,075

  Operating expenses
    Selling, general and administrative
     expenses                                      2,205             1,917
    Research and development expenses                835               741
    Royalty expense                                  151               177
    Amortization expense                             467               356
    Purchased research and development                72             4,117
    Loss on assets held for sale                     352
                                                   4,082             7,308
  Operating income (loss)                            416            (3,233)

  Other income (expense):
    Interest expense                                (433)             (291)
    Other, net                                        44              (180)

  Income (loss) before income taxes                   27            (3,704)
    Income taxes                                      64               150
  Net loss                                          $(37)          $(3,854)


  Net loss per common share - assuming
   dilution                                       $(0.02)           $(3.19)

  Weighted average shares outstanding -
   assuming dilution                             1,485.5           1,207.0


                      BOSTON SCIENTIFIC CORPORATION
             NON-GAAP NET INCOME (LOSS) AND NET INCOME (LOSS)
                     PER COMMON SHARE RECONCILIATIONS
                               (Unaudited)

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                                   Nine Months Ended   Nine Months Ended
                                      September 30,       September 30,
                                          2007                2006
                                             Impact              Impact
                                      Net      per        Net      per
                                     income  diluted     income  diluted
                                     (loss)   share      (loss)   share
  In millions, except per share data
  GAAP results                       $(37)  $(0.02)     $(3,854)  $(3.19)
  Non-GAAP adjustments:
    Acquisition and divestiture
     related charges                  456     0.30        4,566     3.77
    Amortization expense              383     0.25 (1)      256     0.21 (2)
  Adjusted results                   $802    $0.53 (1)     $968    $0.79 (2)

  (1) Calculated by assuming stock-based dilution of 14.5 million shares
  (2) Calculated by assuming stock based dilution of 14.3 million shares

                                                   Nine Months Ended
                                                      September 30,
                                                 2007              2006
  Acquisition and divestiture related
   charges
    Loss on assets held for sale                   $352
    Purchased research and development               72             $4,184
    Integration costs (a)                            34                 42
    Fair-value adjustment for the sharing
     of proceeds feature of the Abbott
    Laboratories stock purchase (b)                   8                100
    Step-up value of inventory sold (c)                                279
    CRM technology offering charge (c)                                  31
    Charitable donation (b)                                              5
    AAA program cancellation net credit (d)                            (13)
                                                    466              4,628
    Income tax benefit (e)                          (10)               (62)
  Acquisition and divestiture related
   charges, net of tax                             $456             $4,566

  Amortization expense:
    Amortization expense                           $467               $333
    Income tax benefit (e)                          (84)               (77)
  Amortization expense, net of tax                 $383               $256

  (a) Recorded $25 million in 2007 to selling, general and administrative
      expenses, $6 million to cost of products sold and $3 million to
      research and development expenses; recorded $39 million in 2006 to
      selling, general and administrative expenses, and $3 million to
      research and development expenses.
  (b) Recorded to other, net.
  (c) Recorded to cost of products sold.
  (d) Recorded a credit of $67 million to purchased research and
      development, a charge of $31 million to research and development
      expenses and a charge of $23 million to amortization expense.
  (e) Amounts are tax effected at the Company's anticipated effective tax
      rate, unless the amount is a significant unusual or infrequently
      occurring item in accordance with FASB Interpretation No. 18,
      "Accounting for Income Taxes in Interim Periods".


                      BOSTON SCIENTIFIC CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Unaudited)

                                             September 30,     December 31,
  In millions                                    2007              2006

  Assets
  Current assets:
    Cash and cash equivalents                     $1,237            $1,668
    Trade accounts receivable, net                 1,511             1,424
    Inventories                                      836               749
    Deferred income taxes                            637               583
    Other current assets                             317               477
      Total current assets                         4,538             4,901

  Property, plant and equipment, net               1,775             1,726
  Investments                                        435               596
  Other assets                                       177               237
  Intangible assets, net                          24,409            23,636
                                                 $31,334           $31,096

  Liabilities and Stockholders' Equity
  Current liabilities:
    Borrowings due within one year                  $254                $7
    Accounts payable and accrued expenses          2,624             2,067
    Other current liabilities                        459               556
      Total current liabilities                    3,337             2,630

  Long-term debt                                   7,903             8,895
  Deferred income taxes                            2,463             2,784
  Other long-term liabilities                      2,114             1,489

  Stockholders' equity                            15,517            15,298
                                                 $31,334           $31,096


                      BOSTON SCIENTIFIC CORPORATION
                             WORLDWIDE SALES
                               (Unaudited)

                             Three Months Ended
                                September 30,            Change
                                                      As
                                                   Reported  Constant
                                                   Currency  Currency
  In millions                  2007     2006         Basis     Basis

  DOMESTIC                     $1,207    $1,273       (5%)      (5%)

    Europe                        418       400        4%       (3%)
    Asia Pacific                  311       239       30%       29%
    Inter-Continental             112       114       (1%)      (7%)
  INTERNATIONAL                   841       753       12%        7%

  WORLDWIDE                    $2,048    $2,026        1%       (1%)

                             Three Months Ended
                                September 30,            Change
                                                      As
                                                   Reported  Constant
                                                   Currency  Currency
  In millions                  2007     2006         Basis     Basis

    Interventional
     Cardiology                  $762      $868      (12%)     (13%)
    Peripheral Interventions/
     Vascular Surgery             154       154        0%       (3%)
    Electrophysiology              36        32       10%        9%
    Neurovascular                  81        81        1%       (2%)
    Cardiac Surgery                47        45        2%        2%
    Cardiac Rhythm Management     517       446       16%       13%
  CARDIOVASCULAR                1,597     1,626       (2%)      (4%)

    Oncology                       58        60       (2%)      (4%)
    Endoscopy                     212       187       13%        9%
    Urology                       100        93        8%        6%
  ENDOSURGERY                     370       340        9%        6%

  NEUROMODULATION                  81        60       36%       34%

  WORLDWIDE                    $2,048    $2,026        1%       (1%)

  Growth rates are based on actual, non-rounded amounts


                      BOSTON SCIENTIFIC CORPORATION
                             WORLDWIDE SALES
                               (Unaudited)

                              Nine Months Ended
                                September 30,            Change
                                                      As
                                                   Reported  Constant
                                                   Currency  Currency
  In millions                  2007     2006         Basis     Basis

  DOMESTIC                     $3,697    $3,579        3%        3%

    Europe                      1,327     1,150       15%        7%
    Asia Pacific                  850       686       24%       24%
    Inter-Continental             330       341       (3%)      (6%)
  INTERNATIONAL                 2,507     2,177       15%       10%


  WORLDWIDE                    $6,204    $5,756        8%        6%

                              Nine Months Ended
                                September 30,            Change
                                                      As
                                                   Reported  Constant
                                                   Currency  Currency
  In millions                  2007     2006         Basis     Basis

    Interventional
     Cardiology                $2,332    $2,781      (16%)     (17%)
    Peripheral Interventions/
     Vascular Surgery             468       506       (8%)     (10%)
    Electrophysiology             109        99        9%        8%
    Neurovascular                 260       243        7%        5%
    Cardiac Surgery               144        83       72%       72%
    Cardiac Rhythm Management   1,580       882       79%       76%
  CARDIOVASCULAR                4,893     4,594        6%        5%

    Oncology                      173       166        4%        3%
    Endoscopy                     620       556       11%        9%
    Urology                       295       273        8%        7%
  ENDOSURGERY                   1,088       995        9%        7%

  NEUROMODULATION                 223       167       34%       32%

  WORLDWIDE                    $6,204    $5,756        8%        6%

  Growth rates are based on actual, non-rounded amounts


                      BOSTON SCIENTIFIC CORPORATION
           NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS
                  THREE MONTHS ENDED SEPTEMBER 30, 2007
                               (Unaudited)

                              Q3 2007 Net Sales as compared to Q3 2006

                                          Change
                               As Reported      Constant      Estimated
                                 Currency       Currency      Impact of
  In millions                     Basis           Basis    Foreign Currency

  DOMESTIC                        $(66)           $(66)

    Europe                          18             (12)           $30
    Asia Pacific                    72              69              3
    Inter-Continental               (2)             (8)             6
  INTERNATIONAL                     88              49             39

  WORLDWIDE                        $22            $(17)           $39

                              Q3 2007 Net Sales as compared to Q3 2006

                                          Change
                               As Reported      Constant      Estimated
                                 Currency       Currency      Impact of
  In millions                     Basis           Basis    Foreign Currency

    Interventional
     Cardiology                  $(106)          $(116)           $10
    Peripheral Interventions/
     Vascular Surgery                -              (5)             5
    Electrophysiology                4               3              1
    Neurovascular                    -              (1)             1
    Cardiac Surgery                  2               1              1
    Cardiac Rhythm Management       71              58             13
  CARDIOVASCULAR                   (29)            (60)            31

    Oncology                        (2)             (2)             -
    Endoscopy                       25              18              7
    Urology                          7               6              1
  ENDOSURGERY                       30              22              8

  NEUROMODULATION                   21              21              -

  WORLDWIDE                        $22            $(17)           $39

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                      BOSTON SCIENTIFIC CORPORATION
           NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS
                   NINE MONTHS ENDED SEPTEMBER 30, 2007
                               (Unaudited)

                              Q3 2007 Net Sales as compared to Q3 2006

                                          Change
                               As Reported      Constant      Estimated
                                 Currency       Currency      Impact of
  In millions                     Basis           Basis    Foreign Currency

  DOMESTIC                        $118            $118

    Europe                         177              81            $96
    Asia Pacific                   164             166             (2)
    Inter-Continental              (11)            (21)            10
  INTERNATIONAL                    330             226            104

  WORLDWIDE                       $448            $344           $104


                              Q3 2007 Net Sales as compared to Q3 2006

                                          Change
                               As Reported      Constant      Estimated
                                 Currency       Currency      Impact of
  In millions                     Basis           Basis    Foreign Currency

    Interventional
     Cardiology                  $(449)          $(483)           $34
    Peripheral Interventions/
     Vascular Surgery              (38)            (49)            11
    Electrophysiology               10               9              1
    Neurovascular                   17              11              6
    Cardiac Surgery                 61              61              -
    Cardiac Rhythm Management      698             667             31
  CARDIOVASCULAR                   299             216             83

    Oncology                         7               4              3
    Endoscopy                       64              50             14
    Urology                         22              20              2
  ENDOSURGERY                       93              74             19

  NEUROMODULATION                   56              54              2

  WORLDWIDE                       $448            $344           $104

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                      BOSTON SCIENTIFIC CORPORATION
  ESTIMATED Q4 2007 NON-GAAP NET INCOME (LOSS) PER SHARE RECONCILIATION
                               (Unaudited)

                                        Q4 2007 Estimate  Q4 2007 Estimate
                                             (Low)             (High)

  GAAP results                               (0.09)            (0.02)

  Estimated amortization expense              0.08              0.08
  Estimated integration costs                 0.01              0.01
  Estimated restructuring and
   restructuring-related expense              0.14              0.12

  Adjusted results                           $0.14             $0.19

An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non- GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

Use of Non-GAAP Financial Measures

To supplement Boston Scientific's consolidated condensed financial statements presented on a GAAP basis; the Company discloses certain non-GAAP measures that exclude certain charges, including non-GAAP net income, non-GAAP net income per diluted share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.

The GAAP measure most comparable to non-GAAP net income is GAAP net income and the GAAP measure most comparable to non-GAAP net income per diluted share is GAAP net income per diluted share. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measure are included in the accompanying schedules.

To calculate regional and divisional revenue growth rates that exclude the impact of foreign exchange, the Company converts actual current-period net sales from local currency to U.S. dollars using constant foreign exchange rates. The GAAP measure most comparable to this non-GAAP measure is growth rate percentages based on GAAP revenue. A reconciliation of this non-GAAP financial measure to the corresponding GAAP measure is included in the accompanying schedules.

Use and Economic Substance of Non-GAAP Financial Measures Used by Boston Scientific

Management uses these supplemental non-GAAP measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP measures to further its understanding of the performance of the Company's operating segments. The adjustments excluded from the Company's non-GAAP measures are consistent with those excluded from its reportable segments' measure of profit or loss. These adjustments are excluded from the segment measures that are reported to the Company's chief operating decision maker and are used to make operating decisions and assess performance.

The following is an explanation of each of the adjustments that management excluded as part of its non-GAAP measures for the three and nine month periods ending September 30, 2007 and September 30, 2006 and for the forecasted three month period ending December 31, 2007, as well as reasons for excluding each of these individual items:

   - Acquisition and divestiture-related charges - For the three and nine
     months ending September 30, 2007 and September 30, 2006, these
     adjustments primarily consisted of: purchased research and development;
     a loss on assets held for sale related to the Company's anticipated
     divestiture of certain components of its Neuromodulation business;
     integration costs associated with the Company's acquisition of Guidant;
     the fair value adjustment related to the sharing of proceeds feature of
     the Abbott stock purchase; the step-up value of acquired Guidant
     inventory sold during the period; the AAA program cancellation net
     credit, which consisted of a credit to purchased research and
     development, facility and severance costs associated with the program
     termination and amortization expense associated with an impairment
     charge on the remaining intangible assets; a CRM technology offering
     charge to make available the Latitude® Patient Management System; and
     a charitable contribution. Purchased research and development is a
     highly variable charge based on valuation assumptions. Management
     removes the impact of purchased research and development from the
     Company's operating results to assist in assessing the Company's
     operating performance and cash generated from operations.  The loss on
     assets held for sale represents a one-time charge associated with our
     intent to sell certain components of our Neuromodulation business, and
     is not indicative of future operating performance and is not used by
     management to assess operating performance. The integration costs
     associated with the Company's acquisition of Guidant do not reflect
     expected on-going future operating expenses. The fair value adjustment
     related to the sharing of proceeds feature of the Abbott stock purchase
     is a non-cash adjustment and is not indicative of the Company's on-
     going operations. The step-up value of acquired inventory is a cost
     directly attributable to the Guidant acquisition and is not indicative
     of the Company's on-going operations, or on-going cost of products
     sold.  The facility and severance costs related to the AAA program
     cancellation do not reflect expected future operating expenses; in
     addition, the amortization charge associated with the impairment of the
     related intangible assets is a non-cash charge and is not reflective of
     future operating performance. The CRM technology offering charge
     represents a one-time cost associated with making this technology
     available to existing patients and the cost is not indicative of future
     expenses associated with the technology. The charitable contribution
     does not reflect expected future operating expenses. Accordingly,
     management excluded these charges for purposes of calculating these
     non-GAAP measures to facilitate an evaluation of the Company's current
     operating performance and a comparison to the Company's past operating
     performance.

   - Amortization expense - Amortization expense is a non-cash charge and
     does not impact the Company's liquidity or compliance with the
     covenants included in its debt agreements. Following the Company's
     acquisition of Guidant, and the related increase in the Company's debt,
     management has heightened its focus on cash generation and debt pay
     down. Management removes the impact of amortization from the Company's
     operating performance to assist in assessing the Company's cash
     generated from operations. Management believes this is a critical
     metric for the Company in measuring the Company's ability to generate
     cash and pay down debt. Therefore, amortization expense is excluded
     from management's assessment of operating performance and is also
     excluded from the measures management uses to set employee
     compensation. Accordingly, management believes this may be useful
     information to users of its financial statements and therefore has
     excluded these charges for purposes of calculating these non-GAAP
     measures to facilitate an evaluation of the Company's current operating
     performance, particularly in terms of liquidity.

   - Foreign exchange on net sales - The impact of foreign exchange is
     highly variable and difficult to predict. Accordingly, management
     excludes the impact of foreign exchange for purposes of reviewing
     regional and divisional revenue growth rates to facilitate an
     evaluation of the Company's current operating performance and
     comparison to the Company's past operating performance.

   - Restructuring and restructuring-related expenses - These expenses
     represent employee-related costs, asset write-downs and other costs
     associated with the Company's restructuring initiatives. These costs do
     not reflect expected on-going future operating expenses and Boston
     Scientific management will exclude them in assessing its operating
     performance, and will exclude them from its operating segments'
     measures of profit and loss used for making operating decisions and
     assessing performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

Non-GAAP net income, non-GAAP net income per diluted share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange may have limitations as analytical tools, and these non-GAAP measures should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are:

   - Items such as purchased research and development, the step-up value of
     acquired Guidant inventory sold during the period, the CRM technology
     offering charge, the loss on assets held for sale, and the fair value
     adjustment related to the sharing of proceeds feature of the Abbott
     stock purchase reflect economic costs to the Company and are not
     reflected in non-GAAP net income and non-GAAP net income per diluted
     share.

   - Items such as Guidant integration costs, facility and severance costs,
     the charitable contribution, and restructuring and restructuring-
     related expenses that are excluded from non-GAAP net income and non-
     GAAP net income per diluted share can have a material impact on cash
     flows and GAAP net income and net income per diluted share.

   - Items such as amortization of purchased intangible assets, though not
     directly affecting Boston Scientific's cash flow position, represent a
     reduction in value of intangible assets over time. The expense
     associated with this reduction in value is not included in Boston
     Scientific's non-GAAP net income or non-GAAP net income per diluted
     share and therefore these measures do not reflect the full economic
     effect of the reduction in value of those intangible assets.

   - Revenue growth rates stated on a constant currency basis, by their
     nature, exclude the impact of foreign exchange, which may have a
     material impact on GAAP net sales.

   - Other companies may calculate non-GAAP net income, non-GAAP net income
     per diluted share, or regional and divisional revenue growth rates that
     exclude the impact of foreign exchange differently than Boston
     Scientific does, limiting the usefulness of those measures for
     comparative purposes.

Compensation for Limitations Associated with Use of Non-GAAP Financial Measures

Boston Scientific compensates for the limitations on its non-GAAP financial measures by relying upon its GAAP results to gain a complete picture of the Company's performance. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit a critical one, of the Company's performance.

The Company provides detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure in the accompanying schedules, and Boston Scientific encourages investors to review these reconciliations.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting non-GAAP net income, non-GAAP net income per share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange in addition to the related GAAP measures provides investors greater transparency to the information used by Boston Scientific management for its financial and operational decision-making and allows investors to see Boston Scientific's results "through the eyes" of management. The Company further believes that providing this information better enables Boston Scientific's investors to understand the Company's operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures may also facilitate comparisons of Boston Scientific's operating performance with the performance of other companies that supplement their GAAP results with non-GAAP financial measures.

SOURCE: Boston Scientific Corporation

CONTACT: Media Relations, Paul Donovan, +1-508-650-8541 (office), or
+1-508-667-5165 (mobile), or Investor Relations, Dan Brennan, +1-508-650-8538
(office), or +1-617-459-2703 (mobile), both of Boston Scientific Corporation

Web site: http://www.bostonscientific.com/

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